The relevant law is Law No. 84/2002 issuing the Law for Non-Governmental Organizations and Foundations (the “NGO Law”) as well as its Executive Regulation issued by the Decree of the Minister of Social Solidarity no. 178/2002 (the “Executive Regulation”).

Other applicable legislation includes:

1.The Military Order of the Governor of Cairo no. 18/1942 (concerning collection of Funds from the public).

2.The Military Order of the Governor of Alexandria no. 192/1943 (concerning collection of Funds from the public).

3.Law 24/1999 concerning the Imposition of Taxes on the Entry to Theatres and Other Places for Entertainment and Amusement and its Executive Regulation issued by the Decree of the Minister of Finance No. 765/1999.

4.Decree of the Minster of Social Solidarity no. 117/2003 concerning the Rules for collection of donations and its amendment issued by the Decree of the Minster of Social Solidarity no. 241/2004.

5.Presidential Decree no. 216/2004 Delegating some of the President’s authorities under the NGO Law to the Minister of Social Solidarity.

6.Presidential Decree no. 421/2005 Organizing the Ministry of Social Solidarity.

7.Decree of the Minster of Social Solidarity no. 83/2006 Delegating some of the Minister’s authorities under the NGO Law to Governors.

8.Law no. 39/1975 concerning Qualifying Handicapped, and the Decree of the Minister of Social Solidarity no. 259/1976 issuing its Executive Regulation of Law 39/1975.

9.Decree of the Minister of Social Solidarity no.68/1964 concerning the Rules of Giving Grants to Non-Governmental Organizations and Foundations and to Unions.

10.Decree of the Minister of Social Solidarity no. 2/1967 concerning the Establishment of Regional Unions between Non-Governmental Organizations and Foundations and to Unions and Approving their Model Statutes.

11.Decree of the Minister of Social Solidarity no. 279/1973 concerning the Approval of the Model Statutes of Non-Governmental Organizations and Foundations and Unions.

12.Decree of the Minister of Social Solidarity no. 19/1974 concerning the Approval of the Model Statutes of the General Union of Non-Governmental Organizations and Foundations, as amended.

The Ministry in charge of the implementation of the NGO Law is the Ministry of Social Solidarity (“MSS”).The Minister of Social Solidarity shall be referred to herein as the “Minister.”

An NGO should be a non-profit organization.[1]This is the main and major difference between it and commercial companies. There are various activities and purposes that can be exercised either through an NGO or through a company. However, the aim of these objectives is what defines which route to follow. If the aim of the founders is to carry out a non-profit activity and to depend on charity and donations to collect resources, then an NGO should be the right structure to serve this purpose.

It is true that the minimum capital of limited liability companies has now been decreased to only LE1’000,[2] which has made it easier to establish commercial companies.It is also true that the number of founders required to start an NGO is 10, while the number of founders required to start an LLC is only two.However, establishment of a non-profit organization as a company is legally problematic, if the commercial company is primarily concerned with doing charitable works; is not established for the purpose of making profits; and only resorts to choosing the form of a commercial company as a way to evade the supervision of MSS and the burdensome regulations of the NGO Law.According to Article 4 of the issuing law of the NGO Law:

“it is prohibited for an entity to carry out an activity that falls within the objectives of non-governmental organizations or foundations without taking the legal form of a non-governmental organization or foundation according to the provisions of the [NGO] Law.”

Article 76(Second)(a) of the NGO Law further provides that any person who establishes a legal entity, whatever its type, which carries out one of the activities of NGOs without following the provisions of the NGO Law shall be penalized by imprisonment for a period not exceeding 6 months and by a fine not exceeding LE2’000 or by either of these penalties.

[2]Decree of the Minister of Investment no. 2/2007 amending Article 67 of the Decree of the Minister of Investment and International Cooperation no. 96/1982 issuing the Executive Regulation of the Law for Joint Stock Companies, Limited Commandites and Limited Liability Companies.

The NGO operates in achieving its objectives within the various fields of development of society.[1]Fields of development of society include any activity that aims at achieving the continuous human development whether these are educational or health or cultural activities or activities relating to social or economic or environmental services or pertaining to consumer protection or the education of constitutional and legal rights or social defence or human rights or other activities.[2]The NGO may work in more than one field provided that each field is approved by MSS.[3]

[1]Article 11 of the NGO Law and Article 48 of the Executive Regulation.

Yes.Activities relating to the education or rehabilitation of handicapped persons are to be carried out by institutions or institutes that are established by MSS or by private persons who receive a permit for this from the Minister.[1]Such persons must incorporated under the NGO Law as a general benefit organization and must have two specialist from MSS on its board of directors.[2]The organization must also satisfy many other requirements provided by the law.[3]

Secret NGOs are prohibited.[1]Persons who have established NGOs carrying out secret activities shall be punished by imprisonment for a period not exceeding one year and a fine not exceeding LE10’000 or any one of these penalties.[2]The NGO will also be liquidated, if the activity is carried out in its name.[3]In addition, persons who have carried out activities of NGOs before the completion of its incorporation shall be punished by imprisonment for a period not exceeding 3 months and a fine not exceeding LE1’000 or any one of these penalties.[4]Such activities will not include activities relating to the incorporation procedures.[5]

4.Targeting the realization of profit or exercising an activity aimed at this purpose.Abiding by business principles to realize a yield contributing to the realization of the NGO’s purposes shall not be considered a violating activity.

Persons who have carried out the activities mentioned in paragraphs 1, 2 and 3 above shall be punished by imprisonment for a period not exceeding one year and a fine not exceeding LE10’000 or any one of these penalties.[7]The NGO will also be liquidated, if the activity is carried out in its name.[8]

[1]Article 11 of the NGO Law and Article 24 of the Executive Regulation.

1.Exemption from notarization and registration fees which are payable by the NGO in relation to all kinds of contracts where it is a party, such as contracts pertaining to property or mortgages or other real rights.[1]NGOs are also exempt from fees for legalizing the authenticity of signatures.[2]

2.Exemption from stamp duties currently imposed or which will be imposed in the future on all contracts, powers of attorney, documents, printed matters, registers, and other material.[3]

3.Exemption from customs duties and other duties imposed on the NGO’s imports of tools, equipment, machines, apparatus, and production requisites,[4] as well as the presents, donations, gifts, and assistance received from abroad.[5]Such exemption is activated by virtue of a decree of the Prime Minister upon the recommendation of the Minister and proposal of the Minister of Finance, provided that these objects are necessary for its primary activity.[6]The NGO or its officers or employees may not dispose of the exempt durable objects before the lapse of five years, unless the customs taxes and duties payable thereon are settled.[7]A list of durable objects which are covered by these provisions is determined by a decree [l1]of the Minister in agreement with the Minister of Finance.[8]

4.Exemption from all real estate taxes on the built realities owned by the NGO.[9]

5.A reduction of 25% from the fees of transportation of equipment and machines by railways.[10]

6.Enjoyment of the residential telephone rates (rather than commercial rates, which are higher) in relation to both the tariffs for subscriptions and phone calls.[11]This must be approved by SID, which must confirm determine that the reduced rates relates to the activities of the NGO.[12]

7.A reduction of 50% on the bills for consumption of water, electricity and natural gas as produced by public institutions, public sector companies, or any governmental authority.This privilege is no longer useful because most of these services are privatized or in the process of becoming so.

Donations extended to NGOs are deemed as an expense to be deducted from the income of the donor up to and not exceeding 10% of the donor’s income.

The NGO may join or participate or belong to a club or an association or an organization or an institution outside Egypt carrying out activities that do not contradict with the objectives of the NGO, provided that it notifies MSS of this and provided that it does not receive an objection from MSS within 60 days from the date of notification.[1]The notice must include the following information:[2]

1.The name of the club or association or organization or institution and its nationality and headquarters.

2.The primary purpose or objective thereof.

3.The country or countries in which it carries out its activities.

Any member in a board of an NGO or any manager who causes the NGO to join or participate or belong to a club or an association or an organization or an institution whose headquarters are located outside Egypt without notifying the competent authorities or despite of its objection, shall be penalized by imprisonment for a period not exceeding 3 months and by a fine not exceeding LE1’000 or by either of these penalties.[3]

[1]Article 16 of the NGO Law and Article 55 of the Executive Regulation.